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Internal Evaluation Group (IEG) Report Gives Mixed Marks to World Bank on Forests

5 February 2013: An evaluation conducted by the Internal Evaluation Group (IEG) of the World Bank Group (WBG) gives mixed marks to the Bank's performance on the three objectives related to conservation, poverty alleviation and economic development set forth in its 2002 Forest Strategy.

The IEG report on "Managing Forest Resources for Sustainable Development: An Evaluation of World Bank Group Experience" concludes that, while the WBG's forest-related interventions have delivered substantial environmental benefits, "poverty reduction, for the most part, has not been satisfactorily addressed."

The evaluation centers on the WBG's forest-related interventions in the decade following the 2002 Forest Strategy, "Sustaining Forests—A Development Strategy," which sought, inter alia, to support the Bank's reengagement in forest sector investments within an inclusive, development-oriented paradigm, while also strengthening environmental and social safeguards.

Between July 2002 and June 2011, the World Bank approved US$2.6 billion for 289 forest sector-related projects in 75 countries, in addition to investments of US$1.5 billion for 56 projects in the forest product sector by the International Finance Corporation (IFC).

The report—based on desk and field-based case studies, extensive interviews, and a literature review, including IEG's 2000 Forest Evaluation and the World Bank's Mid-Term Review of Implementation—evaluates the WBG's forest-related interventions in protected areas; payments for environmental services; participatory forest management; sustainable land management; partnerships and institutional collaboration; and legal and institutional reforms in support of the management of natural forests.

In regard to protected areas, the IEG finds that the Bank helped to designate 24 million hectares of critical forest land as protected, 45.5 million hectares as indigenous lands, and 2.1 million hectares as community-managed extractive reserves. However, the report concludes that alternative livelihood schemes incorporated into the design of protected area projects were not successful.

On sustainable land management, the report finds that the WBG's forest-related projects have implemented soil conservation, reforestation and other technical interventions, but did not pay sufficient attention to the rights of people to the land or involvement of beneficiaries in land management once technical interventions had been completed.

On legal and institutional reforms, the IEG finds that the Bank's support for industrial timber concessions in the tropical moist forests of Central and West Africa have helped advance the rule of law, transparency, accountability and environmental safeguards. The report, however, goes on to say that there is insufficient evidence to conclude that these reforms have led to sustainable and inclusive economic development.

In light of these findings, the IEG offers seven specific recommendations on improving the WBG's operational effectiveness and strategic alignment. In regard to operational effectiveness, the IEG recommends more meaningful community participation in the design and management of protected areas; expanded support for participatory forest management to level the playing field for community-based forest enterprises; and further development and utilization of sustainable forest management outcome indicators. It also recommends a comprehensive review of the economic, environmental and social outcomes associated with industrial timber concession reforms in tropical moist forest countries to help determine whether the WBG should continue its efforts in this area.

In regard to strategic alignment, the report recommends enhancing IFC's upstream investments and developing mechanisms and instruments to leverage synergies between the WBG's public and private sector arms.

In acknowledgement of the report, the WBG Management has issued a response strongly challenging the IEG's recommendations on timber concessions in tropical moist forests, while endorsing, with some qualifications, its other findings and recommendations. The Management Response rejects the IEG recommendation to review the outcomes of timber concession reforms in tropical moist forests on methodological and strategic grounds, noting its position that the "IEG takes a narrow view of Bank supported ‘concession reforms in tropical moist forest countries with weak governance' missing the broader policy, institutional, and legal environment in which these reforms were introduced."

The Management Response adds that the Bank's work on timber concessions has "created the space for a policy dialogue with governments about alternative land uses." It further states that these efforts "were part of much wider institutional reform processes and were never undertaken as standalone, narrowly-defined interventions."